Question

Kathryn invests $8,327 in a savings account with a

fixed annual interest rate compounded continuously. After
10 years, the balance reaches $18,532.08. What is the
interest rate of the account?

Answer 1

Below

Explanation:

The equation to use for CONTINUOUS compounding is :

FV = PV e^(it)

18532.08 = 8327 * e^( i*10) where i is the interest in decimal form

18532.08/8327 = e^(10i)

2.225541 = e^(10i) now take natural log (ln) of both sides to get

.8000 = 10i

i = .08 or 8% interest